The International Monetary Fund said China’s fiscal position is weaker than official data shows but not significant enough to cause alarm, the South China Morning Post reported, citing an IMF report released Wednesday. The IMF report also warned the nation is now “more vulnerable to a macroeconomic shock” because of higher debt and bigger deficits. The mainland’s augmented fiscal debt, which mainly refers to borrowings by local governments, was estimated to have increased to about 45 percent of its 51.9 trillion yuan (HK$66.6 trillion) gross domestic product in 2012. The biggest challenge for the central government is setting up a better framework to manage and monitor local government borrowings, the report was quoted as saying.
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